Our Thoughts on the 9th Annual European Fund Finance Symposium

Introduction

Old Billingsgate, London was the venue for the 9th Annual European Fund Finance Symposium which took place on 18 September.

The 9th Annual European Fund Finance Symposium brought together sponsors, lenders, investors, and advisors for engaging and forward-looking exchanges on the current developments in fund-level financing across Europe. Amidst a landscape of ongoing innovation, dynamic market conditions, and evolving investor needs, the discussions highlighted the adaptability, creativity, and collaborative spirit driving the industry forward through 2025 and beyond.

This publication captures insights from selected panel discussions, exploring opportunities in market conditions and fundraising, the evolution of subscription and hybrid facilities, innovative NAV and preferred equity solutions, expanding lender appetite, best practices in documentation and risk management and the growth of secondaries and continuation vehicles. Our aim is to provide a concise, focused overview of the exciting trends shaping the future of European fund finance.

Our global team have prepared summaries of various panels and reflect the valuable perspectives shared by panellists and audience participants.

If you have not seen it already, take a look at our most recent edition of FUNDed which includes an analysis of data collected throughout the first half of 2025 and highlights trends and developments that are influencing the fund finance market.

PANEL: Market Developments in EMEA

• 2024 and 2025 have seen a slower fundraising environment, with deals harder to close. Multiple closings and delayed processes have been seen more frequently.
• There has been a growth in NAV facilities, driven by this slower fundraising and the need for liquidity. Hybrid facilities are also becoming more common.
• There has also been a growth in evergreen structures as managers seek access to new investor pools. These come with their own challenges (particularly managing liquidity mismatches).
• SMAs have also grown significantly in popularity, particularly with sovereign wealth funds and Middle Eastern investors. This has presented some specific challenges due to the concentrated investor base, with subscription facilities evolving to address such issues.
• The growing allocation into private markets has also raised diligence requirements and liquidity concerns, with traditional fund structures evolving to account for this.
• Looking forward, we can expect to see continued growth of NAV facilities, evergreen products and SMAs.

PANEL: GP Financing Solutions (Trends and Developments)

• GP financing has seen significant evolution, driven by the dual pressures of larger fund sizes and heightened investor expectations for general partners (GPs) to maintain substantial “skin in the game.” As fund sizes grow, the absolute capital commitment required from GPs increases, prompting a search for innovative financing solutions. This is further complicated by challenging exit environments, which make liquidity more difficult to achieve.
• A key trend is the diversification of financing options available to GPs. These include personal financing through wealth managers, personal lending backed by the corporate entity, cash flow lending and, for larger managers, access to general corporate facilities, the debt capital markets and private placements. The choice of financing is often dictated by the GP’s stage in its lifecycle.
• The market has also seen an expansion in the lender base, with private credit, collateralized fund obligations, and insurance products now supplementing traditional debt options. The complexity of financing structures has increased, with GPs leveraging management fee income streams and seeking higher advance rates, though this must be balanced with the transparency and disclosure requirements of the limited partners (LPs).
• Succession planning has become a focal point, with LPs demanding clear plans. The importance of integrating financing considerations in LPAs was also discussed and flagged as an important factor in facilitating deal execution.
• Relationship lending remains crucial, especially for private wealth managers, though private credit lenders are more yield-focused.

PANEL: Securitisation and Fund Finance Products

• The panel highlighted the different forms of products emerging and evolving in the securitisation toolkit for fund finance transactions, with benefits in capital treatment for lenders set against increased compliance and reporting obligations for borrowers.
• Capital call securitisations tend to be private securitisations rather than public securitisations going into the broader market. This can result in banks effectively partnering with a limited number of co-lenders, allowing for increased liquidity for the borrower.
• Managers continue to show interest in these tools, given the opportunity for reduced pricing benefits to them as a result of lenders receiving a regulatory capital relief. These products also allow for alternative lending groups (e.g. insurance-based investors) to move into this lending space.
• Additional considerations do arise with these products, though. The less onerous of the two main obligations for setting up the structure is risk retention (where a fund-side entity retains a percentage of “skin in the game” to retain a portion of the financial risk), which is generally not an issue given advance rates offered by lenders being in the region of 50-70%. The heavier burden on the sponsor comes from their reporting obligations, which can be significantly more onerous than a sponsor entering this space may be accustomed to. Templates for reporting are also not always suited for esoteric products and alternative asset classes.
• These products remain highly specialized, so early discussions with advisors are key to avoid pitfalls and misunderstandings in navigating the setup of such structures.
• The broad direction of travel is positive, though, with more market participants and an increasing familiarity in reporting.

PANEL: Institutional Investor Panel (Insurance, Pension Fund etc)

• Sub line remains attractive for pension and insurance groups investing directly.
• A strong history of performance and returns is the main reason, including the risk return (default) profile.
• Direct institutional investment in the sub line product is an excellent liquidity management tool for institutional (particularly pension) investor groups.
• Indirect investment (and allocation to an intermediary manager for exposure to sub line) may work better for certain institutional groups, because of: (i) operational complexity of originating / administering an RCF product, (ii) aggregation of the amount to be invested; and (iii) access to manager allocation and investment expertise in the sector (i.e. getting exposure to the best deals).
• In essence, indirect investment allows institutions to outsource the end-to-end access to the sub line asset class – origination, portfolio management, compliance and reporting.
• Ratings are key for regulatory capital calculation, particularly where an institutional investor does not have their own rating methodology for these types of loan products.
• Whilst the segment is very stable, potential challenges to growth of the market in the next 2 to 3 years include: capital raising challenges and pricing (e.g. US rate cut etc.).

PANEL: Rated Note Feeders and Collateralised Fund Obligations

• This panel explored rated note feeders (RNFs) and collateralised fund obligations (CFOs), focusing on their structures, use as a liquidity tool, growth in the market, and the regulatory landscape between the UK/European Union and the United States.
• For CFOs, the panellists agreed that the last year saw an increase in GP-led private credit secondaries. There was also a notable increase in infrastructure-related RNF transactions. The discussion highlighted the growth of these products, with issuance of both RNFs and CFOs expected to reach record levels in 2025: estimated at approximately $9 billion and $16 billion, respectively, by early September, and projected to surpass $13 billion and $20 billion, respectively, by year-end.
• Regulatory differences between the EU/UK and US markets, including matching adjustment eligibility, which allows insurers to hold certain long-term assets, and capital treatment of these products by the NAIC, were examined. The insightful session concluded with perspectives on future market developments.

PANEL: Secondary Market Transactions Latest Trends

• There has been incredible growth in this evolving market.
• The panel discussed the diverse changes in the past decade with the emergence on GP-led transactions from the initial LP-led trades and the changes based on strategies, from buyouts and venture to private equity, infrastructure and real estate. There has been over 50% growth in the market with many new innovations.
• The rationale for secondaries has also changed, from a need for liquidity and the necessity to exit early from an investment, to a more strategic approach focused on diversifying portfolios. There are hardly any distressed assets, and we are currently seeing more high-quality deals.
• It is a tool for the market, with institutional investors having a more strategic and systematic review of their portfolios.
• In terms of figures, deals totalled US$26 billion in 2019 and US$24 billion in the first half of 2025. The transactions have also become larger and more specialised.
• The major shift has been toward quality and the capital price strategy. COVID accelerated the market’s move into continuation funds and to the retention of the best assets with stable businesses. This has led to an increased focus on managing better portfolios, including more careful screening of preferred buyers.
• It is expected that the market will continue to experience the high growth and high demand as it has over the past years.

PANEL: Market Developments, Future of FF, AI and Regulatory Outlook

• The panel considered the macro-level challenges and uncertainties based on high interest rates from the different perspectives of GPs and lenders.
• The GP perspective mainly noted that liquidity is available, but it has been very challenging to navigate the markets with diverse lenders and products available. It is also difficult to consider the consistency of lenders in the market and to understand the different products available in fund finance.
• From a Lender perspective, there are more concerns in terms of regulatory requirements, capital treatment and credit risk insurances. There is an expectation of more regulatory requirements which would have an impact on capital treatment. There is an opinion that there will be a greater requirement for ratings to benefit from preferential regulatory capital requirements.
• There has been a major increase in the tools available to sponsors, but also there have also been many more lenders entering the market (particularly with non-bank lenders). Currently, 70% of credit market in the US comes from non-bank lenders.
• The panel also discussed the shift from a fund finance product to a fund finance solution, which requires consideration of the driver of each transaction, the specific goals of the client, the liquidity required and confidence in the counterparties. These factors must be aligned with the regulatory requirements.
• There is also a significant consideration of both capital requirements and capital treatment, as well as whether there are any licensing requirements. This presents an opportunity for many lenders to consider diverse ways of getting involved, whether through establishing in different jurisdictions (with the licensing requirements needed) and other opportunities of involvement (sub-participations and retention of risks).

PANEL: The Evolution of NAV facilities to Private Equity, Real Estate and Infrastructure Funds

• While NAV products existed before 2020, they saw a dramatic increase during the pandemic given liquidity issues and exit delays due to concerns around accurate valuations. Their Increased use resulted in attention from LPs to ensure that GPs were utilising these facilities within the boundaries of fund documentation.
• The perceived view was that GPs were not fully disclosing to LPs the use of NAVs, and so ILPA produced guidelines for increased disclosures and express authorisations for the use of such facilities to be built into LPAs. The general view of the ILPA guidance since its release has been positive, with a resulting increase in disclosure regarding their use and a reasoned approach to their use case.
• Guidance generally hasn’t resulted in LPAs and offering documents having NAV-borrowing specific language built in, apart from more generic language stating that such facilities may be used from time to time. The focus has instead turned to removing any inadvertent roadblocks to the use of such facilities that might have inadvertently been built in as a result of overly prescriptive subscription financing language in LPAs.
• There has been an evolution in security packages, sometimes replaced by elements of credit support, such as independent valuation rights, reduced LTV requirements or delivery of equity commitment letters.

NAVs are now being used earlier in fund life cycles, often to bridge the phase between the use of capital call facilities and downstream portfolio company borrowing, without holding up investment activity.

PANEL: Evergreen Funds – The Rise of Evergreen Funds and the Challenge for Fund Finance

• The panel discussed how evergreen funds are reshaping the fund financing landscape.
• From the managers’ perspective, evergreen funds open access to new investor pools (HNWI and retail investors) while offering flexibility on entry and exit. They also create challenges in managing liquidity mismatches between periodic investor redemptions and illiquid underlying assets. Financing tools such as subscription lines, NAV facilities, and hybrids are being adapted to bridge this gap.
• From the lenders’ perspective, evergreen funds are more complex to underwrite than closed-end funds. With evolving investor bases, continuous capital flows, and shifting portfolios, lenders must rely on dynamic covenants, eligibility criteria, and frequent reporting to manage risk.
• Facilities are typically secured by uncalled capital, by fund assets, or by a combination of both, depending on the type of financing. Panelists emphasized the need to balance operational flexibility for managers – such as adding or substituting assets without excessive burden – with lender protections through concentration limits, eligibility tests, and robust reporting.

Panel takeaways:

1. Evergreen funds expand investor reach but heighten liquidity management challenges.
2. Collateral packages need to combine flexibility for managers with safeguards for lenders.
3. Evergreen funds are expected to grow significantly – potentially increasing by 20% within the next decade.

PANEL: Developing the Alternative Lender Landscape

• The panellists discussed the rise and evolution of the alternative lender landscape over the last 10-20 years.
• It’s been driven primarily by three factors:

1. 1. Regulation – with traditional banks having tighter regulatory capital requirements, it’s allowed other players such as private credit funds into the market.
   2. Liquidity – over the past decade, there has been an abundance of dry powder in the market, meaning investors need to find new investments and are using new structures to deploy those funds.
   3. Underwriting capability – alternative lenders are more keen to underwrite different structures and take different risks than traditional banks, thus providing more flexibility to the market.

• Fundraising is still at its lowest level. Interest rates, while coming down, remain elevated, driving the need for NAV lines. Traditional banks have been slow to embrace these, which has allowed private credit funds and other alternative lenders to identify and fill this gap on the market.
• Alternative lenders are now part of the ecosystem of fund finance, providing another tool in the box for GPs to utilise as part of their financing solutions and generating innovative products in the market.
• The panellists’ prediction for the next 12 months is that there will be increasing demand from GPs and investors for flexibility, and there will be more partnerships between traditional banks and alternative lenders to provide various financing options to the market.